Chairman of the Senate Finance Committee Chuck grassleyChuck Grassley Biden faces falling poll numbers Congress must push for more accountability in tragic sexual abuse of gymnasts Franken targets senators from both sides in new comedy tour MORE (R-Iowa) and Ranking Member Ron WydenRonald (Ron) Lee Wyden Biden touts “progress” in “candid” meetings on .5T Manchin plan: Biden told moderates to present price of reconciliation bill Biden uses series of meetings to unite factions in war MORE (D-Ore.) On Thursday criticized new Treasury Department guidelines on the tax treatment of paycheck protection program (PPP) loan-related expenses, asking the department to reconsider its approach.
“We encourage the Treasury to reconsider its position on the deductibility of these expenses and the timing of these deductions, in order to provide relief to small businesses that need it most,” Grassley and Wyden said in a statement.
The PPP is a coronavirus relief program whereby small businesses have been given loans that can be canceled if the proceeds are used to maintain the payroll. The legislation that created the PPP includes a provision stating that loan forgiveness is not considered taxable income.
According to Treasury and IRS guidelines released Wednesday night, if a company has not had its PPP loan canceled at the end of the year but expects the loan to be canceled in the future, the The business cannot deduct the expenses related to the loan, even if the business has not yet applied for forgiveness.
The guidance follows a Treasury and IRS notice released in the spring stating that expenses associated with loan cancellation under the P3 are not deductible.
secretary of the treasury Steven mnuchinSteven Mnuchin Former Treasury Secretaries Tried To Solve Debt Limit Deadlock In Talks With McConnell, Yellen: Menendez Report, Rubio Asks Yellen To Investigate JBS Meat Packer The Hill’s Morning Report – Featured by Goldman Sachs – Biden rallies Senate Dems behind massive spending plan MORE said in a statement Wednesday that the new guidelines give taxpayers more clarity.
“These provisions ensure that all small businesses receiving PPP loans are treated fairly, and we continue to encourage borrowers to request loan forgiveness as quickly as possible,” he added.
But Grassley and Wyden said in their statement that the new guidelines, as well as guidelines released earlier this year, run counter to legislators’ intention that small businesses receiving PPP loans can qualify for deductions for ordinary and necessary business expenses.
“Unfortunately, the Treasury has now doubled its stance on new guidelines that increase the tax burden on small businesses by speeding up their tax liability, all at a time when many businesses continue to struggle and some are starting to shut down again,” the officials said. senators. “Small businesses need help to maintain their cash flow, not constraints. ”